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| October 5, 2006 |
| Mitsubishi Rayon Co., Ltd. |
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| Company |
: |
TOLI Corporation
|
| President |
: |
Kenji Kashihara |
| Securities Code |
: |
7971
(1st sections of TSE & OSE) |
| Contact |
: |
Motohiro Nagashima,Senior Manager,
Management
Planning Division |
| Phone |
: |
+81-(0)6-6494-6637 |
|
| Company |
: |
Mitsubishi Rayon Co., Ltd. |
| President |
: |
Masanao Kambara |
| Securities Code |
: |
3404
(1st sections of TSE & OSE) |
| Contact |
: |
Michio Tatebayashi,
Public & Investor Relations
Office |
| Phone |
: |
+81-(0)3-5495-3100 |
|
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Basic Agreement on Reorganization of Carpet Operations
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Mitsubishi Rayon Co., Ltd. has reached a basic agreement with TOLI Corporation under which the carpet production facilities of Mitsubishi Rayon’s consolidated subsidiary Mitsubishi Rayon Carpet Co., Ltd. are to be sold to the TOLI Group. The sales rights to the carpets manufactured at the said facilities will be held by a company to be newly established, which will be jointly owned by Mitsubishi Rayon and TOLI.
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| Background to this Agreement |
Both TOLI and Mitsubishi Rayon Carpet are principally engaged in the business of manufacturing and marketing carpets, most of which are carpet tiles for office use. The market for carpet tiles in Japan is showing a strong upward trend, supported by vigorous demand for office renovation work, as well as for non-office applications. On the other hand, the profitability of this business is deteriorating as a result of falling market prices, particularly for standard items, coupled with rising prices of the main raw materials, such as nylon fibers, PVC resin, plasticizers, and others.
In view of this situation, TOLI and Mitsubishi Rayon decided to implement the above-described reorganization of their carpet operations with the aim of raising the efficiency of production and marketing, and achieving improved profitability.
With this amalgamation, TOLI, which is a carpet manufacturer possessing a nationwide interior furnishings sales network, will manage and control all the carpet manufacturing facilities. At the same time, this move will reinforce the sales network of TOLI and Mitsubishi Rayon Carpet. |
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| Outline of Proposed New Company |
| Name |
: |
Dia Carpet Co., Ltd. (subject to confirmation) |
| Paid-in capital |
: |
¥50 million |
| Equity stakes |
: |
TOLI Corporation, 80%;
Mitsubishi Rayon
Co., Ltd., 20% |
Address of
Head Office |
: |
2-10-4 Higashi-Shinbashi, Minato-ku, Tokyo |
Proposed
establishment |
: |
Mid-November 2006 |
| Proposed start of
operations |
: |
December 1, 2006 |
Main line of
business |
: |
Sale of interior goods, principally carpets |
|
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| Notes: |
| 1. |
The new company is also scheduled to act as a sales agent for products under the TOLI brand name. |
| 2. |
The new company will take over the brand names currently owned by Mitsubishi Rayon Carpet Co., Ltd. |
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| For further inquiries, please contact: |
| Public and Investor Relations Office |
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The contents shown herein are accurate as of the time of posting.
